Novonix shares: What does the next year hold in store?

It was a pretty tough year for ASX 200 shares over FY2022, with the S&P/ASX 200 Index (ASX: XJO) falling by 10.19%. So it might come as something of a surprise to learn that Novonix Ltd (ASX: NVX) shares outperformed the index by quite a fat margin.

As my Fool colleague Brooke shone a light on last week, Novonix recorded an FY2022 high of $12.47 a share but a low of just $2.07. Despite this enormous disparity, Novonix ended up with a very modest gain of 2.7% for the 2022 financial year. But that 2.7% was still a vast outperformance of the ASX 200 index’s 10.19% loss.

Even so, Novonix shares have had a painful start to 2022, with the battery metals company now down almost 80% year to date.

But now that we’ve finished up with FY2022 and are on our way into FY2023, what might the next year hold in store for the Novonix share price?

Are Novonix shares heading higher in FY2023?

Well, one ASX broker who isn’t holding its breath is Morgans. As my Fool colleague James covered earlier this week, Morgans is currently feeling “gun shy” on the Novonix share price. This broker has just retained its hold rating on the company but has cut its 12-month share price target by 39%, down to $2.98 a share.

Despite the near-41% upside that the share price target would represent over the current Novonix price, Morgans remains uncertain about the business. Here’s some of what the broker said:

The market is pricing in risk much more aggressively and NVX has not yet proven the viability of its anode business with blue chip clients at scale.

We have therefore reduced our target price to $2.98 (-39%) with a higher assumed cost of equity and a later assumed ramp up of production.

So if Morgans is to be believed, FY2023 might just be a good one for the Novonix share price. But with all of that uncertainty from the broker, investors might not be feeling too comforted today. So we shall just have to wait and see.

At the current Novonix share price, this ASX battery metals share has a market capitalisation of $1.04 billion.

The post Novonix shares: What does the next year hold in store? appeared first on The Motley Fool Australia.

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More reading

• Why Costa, Domino’s, EML, and Novonix shares are dropping
• Novonix share price sinks 8% following ‘gun shy’ broker note
• These 3 ASX 200 lithium stocks are exploding on Friday
• Why was FY22 a rollercoaster period for the Novonix share price?
• Why did the Novonix share price slide nearly 36% in June?

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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